China Oceanwide dips into American insurance

A Chinese conglomerate has agreed to buy the insurer Genworth Financial of Virginia for $2.7 billion, in the latest example of Asian firms buying American insurance companies.

The conglomerate, China Oceanwide, which has interests in real estate and finance, said on Sunday that it had struck a deal to buy Genworth for $5.43 per share, offering a four per cent premium to shareholders compared with Friday's closing. It also said that it would contribute an additional $1.1 billion to cover maturing debt and to invest in Genworth's life insurance business.

Genworth, which provides mortgage and long-term-care insurance, would become a stand-alone subsidiary of Oceanwide.

Genworth also announced on Sunday that it would have an after-tax charge of $260 million to $300 million in the third quarter after reviewing how much it would have to keep in reserve for long-term-care claims.

The deal is part of a wave of interest from Japanese and Chinese companies looking to make acquisitions abroad. Japanese insurance companies have been making purchases overseas as a way to protect themselves as Japan's population ages. Chinese companies have been buying foreign outfits as economic growth slows domestically. Major deals this year include China National Chemical's $43 billion offer to acquire Syngenta of Switzerland, a maker of farm chemicals and seeds, and the Chinese insurer Anbang's deal to buy a portfolio of high-end hotels from the Blackstone Group, an agreement valued at $6.5 billion.

©2016 The New York Times News Service